Understanding Group Disability Insurance – Features and Limitations

Understanding Group Disability Insurance – Features and Limitations

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There are plenty of horror stories out there relating to group Disability insurance and the claims experience people have. Although some of these situations and stories are very sad, a major contributor of these disappointments and the bad reputation is a lack in understanding of group Disability insurance benefits. Employers provide these benefits, often only keeping the price in mind, and employees accept these benefits without ever questioning their quality. The fact of the matter is that group Disability insurance is not intended to be high quality income protection. However, the cost is lower and medical underwriting is limited, if any, allowing employers to provide it and those who are otherwise uninsurable to have some level of protection.

Group Long-Term Disability insurance traditionally insures 60% of a person’s income, up to a specified maximum monthly benefit (i.e. $6,000, $10,000, etc.) and will pay benefits to age 65. Depending on participation levels and who pays the premiums, group Disability insurance usually does not require any medical underwriting, which is one of the greatest benefits of having it. Overall, most people assume group Disability insurance to be simple and sufficient, but there are many things that should be understood.

The definition of disability, which describes the circumstances in which a person can qualify for a claim, used in most group Disability insurance contracts is one detail that is often overlooked. Most group contracts will…

Source by Michael Kortz